S. 153A : Assessment- Search- HSBC Geneva accounts- In absence of incriminating material found during search, no addition can be made in respect of completed/unabated assessments- Foreign bank account additions based merely on the Base Note received from the French Government and not on search material were unsustainable- Addition under section 69A also deleted as Revenue failed to establish assessee’s ownership of foreign bank accounts. [S. 69A, 132, 143(1), 143(2), 147, 148, 153A]
The assessee’s return for A.Y. 2006-07 had attained finality as no notice under section 143(2) had been issued before the search. The search conducted on 25/26.08.2011 did not yield any incriminating material relating to the foreign bank accounts. The additions under section 69A were made solely on the basis of a Base Note received from the French Government prior to the search alleging that the assessee was a beneficiary of foreign entities maintaining HSBC Geneva accounts. The Tribunal deleted the additions holding that, in an unabated assessment, section 153A permits additions only on the basis of incriminating material found during the search. It further held that the Revenue had failed to prove that the assessee was the owner of the foreign bank accounts, a mandatory pre-condition for invoking section 69A. Dismissing the Revenue’s appeals, the Bombay High Court held that the issue stood concluded by the decision of the Supreme Court in PCIT v. Abhisar Buildwell (P.) Ltd. (2023 ) 454 ITR 212 (SC) and reiterated that no addition can be made in completed assessments under section 153A in the absence of incriminating material unearthed during the search. The Court also held that the Base Note could not substitute incriminating search material and that, since the Revenue failed to establish ownership of the foreign bank accounts by the assessee, section 69A had no application. Accordingly, no substantial question of law arose, and both the Revenue’s appeals were dismissed. (AY. 2006-07)( ITA Nos. 118 & 132 of 2020, dated 01.07.2026)
Pr. CIT v. Arunkumar Ramniklal Mehta (Bom.)(HC) www.itatonline.org .
[Coram : Hon’ble Shri Justice B. P. Colabawalla & Hon’ble Shri Justice Firdosh P. Pooniwalla]